Karthikeyan

Money is anything that is generally accepted as a means of payment for goods and services.

Functions of Money

1. Medium of Exchange

Money is used to buy and sell goods and services.

Example: Using ₹100 to buy a notebook.

2. Measure of Value (Unit of Account)

Money measures and compares the value of different goods and services.

Example: A pen costs ₹20 and a book costs ₹200.

3. Store of Value

Money can be saved and used in the future.

Example: Keeping ₹500 in a bank account for later use.

4. Standard of Deferred Payment

Money is used to make payments in the future.

Example: Repaying a loan in monthly installments.

Characteristics of Good Money

1. Durability

Money should last a long time without getting damaged.

2. Portability

Money should be easy to carry from one place to another.

3. Divisibility

Money should be divided into smaller units.

Example: ₹100 can be divided into ₹50, ₹20, ₹10, etc.

4. Acceptability

People should be willing to accept it as payment.

5. Scarcity

Money should not be too abundant, otherwise it loses value.

6. Uniformity

Units of money should be identical in value.

Example: Every ₹100 note has the same value as another ₹100 note.